How can we create a vector space where word spelling and pronunciation can be easily compared?
If you only need the vector space as a way to obtain a similarity measure, you may want to consider a distance measure instead. Similarity and distance are inversely related: identical words have maximum similarity or zero distance, and as the similarity decreases, the distance increases. 

For instance, the Wagner-Fischer algorithm computes the edit distance between two strings of characters. This edit distance takes into acccount insertions and deletions, as in your examples, but also substitutions (for example "gray" vs. "grey").

The article linked above includes pseudocode that should translate easily to actual code.